Financial Accountability of Human Services Agencies

“Government Is Criticized On Oversight of Head Start,” March 18, 2005, New York Times

“D.C.'s Anti-Poverty Agency Is Under Federal Scrutiny;

Possible Fiscal Irregularities Questioned,” March 24, 2004, Washington Post

“Ethics Charges Filed Against Top Officials Of Nassau Health Unit”, April 24, 2003, New York Times

Three different headlines, but they all tell the same story -- supporting the functioning of human services organizations is a financial challenge. The work of these agencies, coupled with limited money, results in a pressing need for close attention to financial management. Frequent newspaper accounts of financial irregularities underscore the increasing call for accountability. The public wants to know, and feels it has the right to know just how and where public money is spent.

In order to guard against distortion of an agency’s true financial health and to achieve credibility with clients, donors, lawmakers, and the public, every human services agency must be financially accountable. Financial accountability is as much a legal concern as it is a fiscal concern. How can we tell if a human services agency is being run in a financially accountable way? Here are 12 questions agency administrators should ask themselves:

1. Who is the one person responsible for managing the accountability structure of each of the agency’s units?

2. Who is the one person responsible for ensuring that the structure clearly defines all areas of responsibility?

3. Is there one person who can delegate financial management tasks within each unit?

4. Are all of the tasks of each of the agency’s units clearly defined and assigned to qualified people?

5. Does any worker have any conflicting duties?

6. In terms of being financially accountable, does everyone fully understand what is expected of them?

7. Do workers know who to contact if certain accounting problems arise?

8. Does each person have sufficient training to complete their assigned tasks?

9. Does each person have the knowledge and experience to make sound financial judgments concerning each task they are assigned?

10. Whose job is it to ensure that there is a reasonable distribution of work in accordance with the available resources?

11. Who is responsible for keeping current records of various aspects of the agency’s financial accountability?

12. Who monitors, in a systematic fashion, the financial accountability structure?

If an administrator has difficulty answering any of these questions, perhaps some fundamental guidelines would be helpful. In order to ensure financial accountability an agency should, at a minimum:

A. operate in accordance with an annual budget that has been approved before the beginning of each fiscal year;

B. maintain financial reports on a quarterly basis. These records should compare actual expenses to budgeted revenues;

C. have an annual audit by an independent Certified Public Accountant;

D. allow clients and employees to have a confidential mechanism to report suspected financial abuse to a neutral third party;

E. have a written procedure and financial manual that is periodically updated;

F. ensure that all documents are signed by a legally authorized employee so that payments and invoices can be processed in a timely way;

G. maintain appropriate liability insurance;

H. maintain a risk management program.

A number of disturbing trends are occurring simultaneously: litigation against human services agencies seems to be on the rise; much of this litigation has been in the form of class action lawsuits; the cost to defend against or settle these lawsuits is mounting. Maintaining a vigilant program of internal financial accountability will help an agency to weather this trend. Management needs to be keenly aware that financial responsibility must be taken seriously if scarce resources are to stretch to their maximum. And, they must be relentless in minimizing costs to simplify procedures and increase efficiencies. We all admit that it is challenging to remain optimistic amid such scary headlines, but there are many of us who have a vital and core belief that there are opportunities now to build human service organizations which can truly be accountable, in every sense of the word.

Responsibility and accountability are the fundamental building blocks of human services agencies; without them, we cannot continue to function.

This commentary originally appeared in Policy & Practice, (June, 2005), 63 (2), 24.

Guest commentary by

Daniel Pollack, MSW, JD

Professor at Yeshiva University’s School of Social Work in NYC

Senior Fellow, Center for Adoption Research,

University of Massachusetts Medical School

Dan can be contacted at (212) 960-0836

Ethnic Cleansing in America

Americans don’t have to travel to Bosnia, South Africa or the West Bank to appreciate the legacy of ethnic cleansing, apartheid or aboriginal territorial disputes. Those injustices can be found right here at home in New York state. Yesterday, with barely any notice, the United States Supreme Court ruled that land recently purchased by Oneida Indians for economic development on the long recognized Oneida reservation can never again become sovereign Indian land. Invoking high minded but ultimately hollow legal principles like “laches, acquiescence, and impossibility,” the Court found that the national government’s indifference, the great increase in property values, the predominantly non-Indian population now residing in the area, the impracticability and disruptive practical consequences of returning land to Indian control, the burden on the administration of state and local governments and the adverse affect on neighboring land owners justified stripping the few remaining Oneidas of tribal sovereignty over their land. At the founding of the United States, the Oneida's homeland comprised some six million acres in what is now central New York. By 1920, only 32 acres continued to be held by the Oneidas. The Supreme Court’s current justification for “wrongs which occurred during the early years of the Republic” provide little rectitude for a nation dedicated to righting many of the historical wrongs around the world.

Social Workers and the Fourth Amendment

It should come as no surprise that social workers and other child welfare workers are covered by the Fourth Amendment to the United States Constitution. What might be surprising is that the most conservative federal district courts are taking the lead in defining this new and rapidly evolving constitutional mandate, most notably the Tenth Circuit Court of Appeals (covering Wyoming, Utah, Colorado, New Mexico, Oklahoma and Kansas).

Applicable to the states through the Fourteenth Amendment's Due Process Clause, the Fourth Amendment provides: "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated...." Because the Amendment focuses on safeguarding persons from unwarranted intrusion, and not on regulating the behavior of particular governmental actors, the prohibition against unreasonable seizures extends to civil, as well as criminal, investigations by the government.

In Dubbs v. Head Start, Inc., 336 F.3d 1194 (10th Cir. 2003), the Tenth Circuit Court of Appeals held that there is no social worker exception to the Fourth Amendment. In Dubbs, eight pre-school children enrolled in the Head Start program were subjected to intrusive physical examinations, including genital examinations and blood tests, on school premises without parental notice or consent.

Also in 2003, the Seventh Circuit Court of Appeals, in Doe v. Heck, 327 F.3d 492 (7th Cir. 2003), held that the strictures of the Fourth Amendment apply to child welfare workers, as well as all other governmental employees. In that case, a private Christian elementary school and a student's parents sued several child welfare caseworkers under the Fourth and Fourteenth Amendments after the caseworkers interviewed a student about corporal punishment without a warrant or the consent of the school or parents.

A Fourth Amendment analysis is based on the totality of the circumstances in determining whether a reasonable person would have believed that he was not free to terminate an encounter with government. Some of the factors considered include:

1) the threatening presence of several officials;
2) the brandishing of a weapon by an official;
3) some physical touching by an official;
4) use of aggressive language or tone of voice indicating that compliance with an official's request is
compulsory;
5) prolonged retention of a person's personal effects;
6) a request to accompany the official to the station;
7) interaction in a nonpublic place or a small, enclosed place;
8) and absence of other members of the public.

In the Tenth Circuit Court of Appeal's most recent decision issued last week, Jones v. Hunt, 2005 WL 1395095 (10th Cir. 2005), the court analyzed a sixteen year old girl's encounter with child welfare social workers "through the eyes of a reasonable sixteen year old" child.

After concluding that the alleged encounter constituted a seizure, the court then reviewed whether the seizure was reasonable which depends on the context in which it took place. With limited exceptions, a search or seizure requires either a warrant or probable cause.

In this case, the court found that the social worker's actions "violated the most minimal standard of which we can conceive." The court held that where no legitimate basis exists for detaining a child, a seizure is plainly unreasonable. The court further found that this standard was clearly established as far back as 1994 when it held, in Doe v. Bagan, 41 F.3d 571 (10th Cir. 1994) that a seizure of a nine year old boy was justified at its inception because a victim of child abuse had identified him as her abuser and a ten minute interview with a social services caseworker was reasonably related in scope to determining Doe's role in the incident.

In a critical footnote in Jones v. Hunt, the court noted that "we do not imply that a social worker investigating allegations of abuse or neglect necessarily requires a warrant, probable cause, or exigent circumstances before questioning a child on public school property. Where a social worker merely conducted an interview of a child at a public school, and thus did not remove the child nor interfere with the sanctity of the private home, we have applied the Terry standard." (a search of a child by a government official is reasonable if "justified at its inception" and "reasonably related in scope to the circumstances which justified the interference in the first place")

The court concluded "it may be that the Terry standard applies even where a social worker removes a child from her parents' custody at a public school following a legitimate investigation into child abuse and neglect."

Should the Fourth Amendment apply to the day to day workings of social workers in child welfare investigations? Do social workers understand and apply this constitutional mandate in your jurisdiction?

Protections for Foster Children Enrolled in Clinical Trials

The following testimony was presented to the House Committee on Ways and Means Subcommittee on Human Resources on Wednesday, May 18, 2005 at a hearing on Protections for Foster Children Enrolled in Clinical Trials.

Alan Fleischman, M.D., Senior Advisor, The New York Academy of Medicine, New York, New York

Roberta Harris, Deputy Secretary, Wisconsin Department of Health and Family Services, Madison, Wisconsin

Marjorie Speers, Ph.D., Executive Director, Association for the Accreditation of Human Research Protection Programs, Inc.

Moira Szilagyi, M.D., Ph.D., Fellow of the American Academy of Pediatrics, on behalf of the American Academy of Pediatrics

Federal Regulation of International Adoption

Introduction

It has been over ten years since the United States signed the Hague Convention on Intercountry Adoption. It has been nearly seven years since the White House transmitted the treaty to the Senate for ratification. It has been four years since the Senate ratified the treaty and President Clinton signed the enabling legislation, the Intercountry Adoption Act (IAA) into law. It has been over three years since the State Department held a series of public meetings to elicit information to inform the process of writing implementing regulations.

International adoption has been a widely accepted practice in the United States for over fifty years. Yet for most of that time, our government has not regulated adoption businesses in any meaningful way. Despite assurances that the IAA would be implemented some time ago, the State Department continues to equivocate about issuing final regulations or what those regulations will do to create greater transparency and accountability. Now, nearly four years after both consumers and industry should have received clear guidelines; the outcome of this process has never seemed more compromised. With the lines drawn between maintaining the status quo and achieving the first meaningful federal regulation and real protections for consumers of international adoption real progress is at risk.

The Regulatory Failure

Fundamentally, the Hague Convention, an international treaty, and the Intercountry Adoption Act, its implementing legislation, were developed to address a range of problems identified in international adoption practice, from concerns about child trafficking to complaints about skyrocketing costs to a rising number of wrongful adoption suits. Nevertheless, over a decade of discussion, debate, Congressional hearings, legislation, meetings and a myriad of detailed comments, four years after the Intercountry Adoption Act was signed into law an impasse remains on how inter-country adoption should be regulated.

No one, it seems - including the “experts” - can agree on how the federal government should appropriately regulate this important, growing but ultimately complicated process. Our national “policy” remains allowing large sums of cash to leave the country in an entirely unregulated system and browbeating foreign governments into surrendering children in a decision making process for their foster children that none of our fifty states would permit for America’s waiting children.

For years, the argument against greater regulation of adoption by the federal government has been rooted in the notion that adoption is a state law issue. While adoption is an important benevolent response to the needs of orphaned children around the world, it is also a big business that generates millions of dollars in revenue. All international adoption is inherently interstate commerce. While the federal government regulates everything from coal mining to organ transplants, international adoption has remained beyond the reach of most federal enforcement or oversight. The State Department’s equivocation has ensured that consumers have more protections when they join a health club than they do when they make this profound and life altering decision.

This country’s failure to adequately regulate international adoption has already had serious consequences. By allowing each state, each agency, indeed, each family to pursue adoption differently the US government has ensured consumers of adoption services have no coherent guidelines to protect their interests. This lack of consistency has only been amplified by the use of the Internet to market adoption services and the growing demand for children. Lacking training in foreign policy or a sound regulatory framework would be adoptive families and their adoption agencies are encouraged to navigate the increasingly complex and treacherous geopolitics of countries around the world with virtually no training and in many cases a vested self-interest. The result has been diplomatic and emotional chaos.

Foreign Adoption at Risk

Predictably, many foreign governments have elected to suspend or ban adoption rather than manage the independent diplomacy of these competing interests. They have also demonstrated increasing resistance to permitting large cash payments to facilitators. According to Ethica: A Voice for Ethical Child Placement in the past fifteen years, 13 countries have suspended or ended their adoption programs. In addition, four additional countries have closed temporarily to investigate charges of corruption or child trafficking. These countries represent 43% of the countries that have provided the majority of children adopted to the US. Though the total numbers of international adoptions have risen slightly the numbers of sending countries has decreased.

Superficially, the adoption industry and the consumers of its services appear to agree that the stated purpose of the Hague Convention on Intercountry Adoption and its implementing legislation in the US served a valuable purpose. By creating uniform standards abuses in adoption could be minimized and the practice itself could grow.

Ironically, attempts to ensure oversight and adequate consumer protections, requiring liability insurance, limiting cash payments and demanding greater transparency for service providers have triggered a firestorm of controversy. Despite the fact that many federal agencies engage in aggressive consumer protection and oversight, the State Department has attempted to balance the interests of service providers large and small with the interests of consumers and the demands of diplomacy. Unfortunately, the proposed regulations demonstrate an inadequate response to abuses that prompted passage of the IAA or how those abuses might be tempered or eliminated and a lack of insight into the economics of international adoption. Conflicts focus on several key areas:

Liability


For many years, adoption agencies working abroad have relied on the services of so called facilitators to identify and procure children for adoption and to navigate the often complex political issues in the sending country. Facilitators often require large cash payments, ostensibly for their services. They also work as independent contractors and have traditionally had little or no exposure to liability when issues related to their service arise. In some instances, facilitators have engaged in illegal activity including money laundering and child abduction. Even then, consumers have had little or no recourse for their actions.

The IAA addresses this problem by requiring that adoption agencies assume responsibility for all of their employees, contractors and facilitators here and abroad. Major adoption trade groups like the Joint Council for International Children’s Services (JCICS) have opposed this provision despite the fact that American companies doing business abroad are routinely expected to take responsibility for and adequately supervise their employees overseas. This loophole has left birth and adoptive families vulnerable to a variety of abuses while their service providers maintain plausible deniability.

Contractual Waivers

The IAA forbids the now common practice by adoption agencies of requiring prospective adoptive to sign waivers of liability on the part of their agency or its agents. Trade groups like the Joint Council hold that professionals in other areas are not expected to meet this standard. However, that assertion is not true. Professionals in occupations involved with the public interest - especially professionals rendering services to clients or patients dependent on them like physicians - are routinely prohibited from seeking exculpatory provisions from their clients. According to the American Adoption Congress, lawyers are specifically prohibited from doing so, for instance in the Model Code of Professional Responsibility Disciplinary Rule 6-102 which states “A lawyer shall not attempt to exonerate himself from or limit his liability to his client for his personal malpractice.” It is hard to imagine a scenario more fraught with emotional dependency that the relationship between an adoption agency and a prospective adoptive family, not to mention a birth family. Thus, there is ample precedent, both legal and ethical, to resolve the issue of waivers in favor of consumers.

Insurance


Perhaps the most controversial provision in the IAA requires adoption agencies to carry professional liability insurance in the amount of $1 million per occurrence. It came as a shock to many policy makers that many adoption agencies operated without insurance. It probably never occurs to many prospective consumers of adoption services to even inquire. According to one JCICS backgrounder, such insurance is “unobtainable.” Even if such coverage were readily available, they allege, it would be prohibitively expensive. This, of course, simply isn’t true either. A number of reputable insurance carriers provide reasonably priced coverage for qualified agencies providing adoption services.

Insurance provisions as required by the new law are reasonable and there are ample precedents in other fields. Insurers will add a layer of consumer protection by helping to enforce the safeguards of professional conduct as they do in other professions. In fact, until the State Department implements consumer protections mandated by Congress the underwriting process might represent the only effective regulation the industry has. Perhaps the question the State Department should be considering is whether or not an agency that cannot be insured should be in business in the first place. It is unlikely that most adoption agency owners would undergo brain surgery by a doctor lacking malpractice insurance.

There have been many experiences where negligence or fraud in an adoption placement has led to severe financial and emotional distress for innocent adoptive families. Even if the cost of insurance premiums was passed on to consumers it would amount to a nominal fee, $300 - 1000 in the context of a costly adoption. This is a fee most prospective adoptive parents would happily assume. It is certainly a cost that could be offset by lowering cash payments to foreign facilitators. Using the ultimate scare tactic to avoid assuming this normal cost of doing business many adoption agencies go on to assert that agencies “will have no choice but to pass this cost onto adoptive families” and that “fewer families will be able to adopt” due to cost. As for that canard, it should be noted that it is impossible to quantify how many qualified; loving families around the world have already been priced out of the adoption market by double-digit fees that the federal government refuses to cap. Since the US effectively limit pricing in other industries, offsetting rising costs with federal subsidies, perhaps it is time to engage in a serious discussion to subsidize adoption costs, either for industry or consumers or both.

Conclusion

Around the world, thousands of children are desperately in need of families. Around the United States there are hundreds of excellent adoption providers seeking to match those children with the thousands of well-qualified families in this country seeking to adopt. The fundamental purpose of the Inter-country Adoption Act was to provide a consistent, clearly articulated business model for inter-country adoption that would limit abuses, protect ethical agencies and consumers and make it easier for everyone to participate in this important component of international child welfare.

Over the years the inaction of the US government and the State Department in particular has penalized good agencies while creating a haven for less good ones. It has ensured that consumers of adoption services will continue to operate without protections afforded to constituents of dozens of other federal agencies and industries. It has created a diplomatic nightmare for foreign governments struggling simultaneously to establish credible child welfare agencies while attempting to accommodate the costly and constant demands of adoption agencies.

Many people with a vested interest in the adoption industry have attempted to persuade policy makers and consumers that any effort to regulate adoption is tantamount to being anti-adoption. However, it is impossible to quantify how many children have been deprived of families because we haven’t. As we fail to take adequate regulatory responsibility for adoption the tens of thousands of children who will continue to languish around the world while the US government remains confused about a task that should be crystal clear.

Guest Commentary by

Maureen Flatley

This is an update of a 1999 article which originally appeared in Decree which is published by the American Adoption Congress

Foster Care Meets the Third Reich<br><em>reference is borrowed from the New England Journal of Medicine</em>

Over one year ago, the Alliance for Human Research Protection in New York City alerted the federal Food and Drug Administration that they had “reason to believe that federal regulations for the protection of children as research subjects have been seriously violated in federally funded HIV research.”

Kudos also to Liam Scheff who in December 2003 broke the story of the drug trials in an online article entitled “The House That AIDS Built”.

AHRP’s letter to the FDA states that “a series of Phase I and Phase II drug experiments were conducted on infants and children who were under the guardianship of the New York City Agency for Children's Services (ACS), and living at Incarnation Children's Center, a foster care facility under contract with ACS. The test subjects were children diagnosed with HIV infection - in some cases infants who were merely "presumed" to be HIV-infected. Phase I and Phase II experiments involve the greatest level of risk and discomfort for children insofar as they test the safety and toxicity of the drugs as well as maximum dose tolerance.”

In response to these allegations, the New York City Administration for Children’s Services (ACS) recently contracted with the Vera Institute of Justice to conduct an independent review of ACS policy and practice regarding the enrollment of HIV-positive children in foster care in clinical drug trials during the late 1980s and 1990s.

The former-leading-critic-turned-revolving-door-head of ACS, John B. Mattingly, defensively responded in a press release “that the policies in place at the time reflected good practice.” That is, if there ever WERE any policies in place that anyone could then or now locate!

The BBC previously reported on this story in November 2004. Now that the New York Times and Associated Press have finally discovered this unbelievable scandal, trial lawyers, like my firm Marsh and Gaughran LLP, can not and should not be far behind. Along with a General Accounting Office investigation and Capital Hill hearings.

And finally, it remains incredible to me that in the 21st Century in the United States of America—where murders, rapists and pedophiles have a Constitutional entitlement to a court-appointed and taxpayer funded lawyer—children are involuntarily placed into foster care with no right to an attorney. In the vast majority of the states, foster children are lucky to get a well meaning but usually ineffectual community volunteer as an advocate in court.

The hundreds of thousands of voiceless and neglected foster children will remain so until Congress, the states and the bar get serious about providing well funded trained lawyers who zealously assert the child's position. Anything less is a sham.

As for Mattingly, we’re enrolling him and the heads and former heads of child welfare in Illinois, Louisiana, Maryland, New York, North Carolina, Colorado and Texas, in an involuntary clinical trial of civil lawsuits. This time foster children will win! Sieg heil.

Intercountry adoption: Who are the good guys?

The January 5, 2005 CNN headline read, “Trafficking a threat to tsunami orphans.” Within days after the tsunami hit, Indonesia had begun putting into place policies which prohibited any child under age 16 from leaving the country. Why? The Indonesian Embassy’s press secretary in Washington explained that “"the government would like to protect the children from potential traffickers.” It had cause for concern – estimates of children trafficked each year range from a half a million to four million.

Is this concern sufficient to interfere with legitimate intercountry adoption? Indeed, is intercountry adoption an act of unparalleled altruism, or is it a sly way of kidnapping a poor country’s children? International child advocates are engaged in finger pointing at each other. One side confidently asserts that, but for intercountry adoptions, the few children who are saved would be destined to be untouchables in the back rooms of institutions in their native countries. The other side claims that cultural genocide and unofficial baby buying is what is really going on. So, who are the good guys?

According to the National Adoption Clearinghouse, Americans adopted 21,600 children from abroad in the year 2003. Many of them had confirmed health problems, among them HIV/AIDS, developmental disabilities, malnutrition, congenital defects, tuberculosis, and hepatitis.

Intercountry adoption raises many general questions: Are such adoptions really in the best interest of the child? Are birth parents relinquishing their babies under economic or cultural duress? Do we know, from valid studies, if the adopted child will adjust satisfactorily to a new culture? Is there an element of classism and imperialism when Americans and Western Europeans secure babies from developing countries?

Modern-day adoption statutes and international conventions balance the interests of children, birth parents, adoptive parents, states, cultures, and countries. Indeed, intercountry adoption is not a topic which can be easily divorced from the swirl of geo- politics. Intercountry adoption implicates the international reciprocal rights and duties that people claim for and from each other. But to limit human interactions to those based solely on duties and rights is to overlook the most essential aspect of being human - genuine concern for one another. Focusing on this communal aspect enhances our most human virtues.

Complicating the resolution of these general issues is the need for answers to three specific questions: Which data is really valuable in determining the best place for a child? What risks are there to a child in terms of abuse and exploitation in the care of an institution in the child’s home country versus those same risks if the child were adopted, whether it is within or outside of their home country? Is there more we can do to help the poorest countries become more efficient in finding homes within their own countries?

Given the large numbers of children who are in the care of orphanages around the world, and an intercountry total worldwide annual adoption rate that numbers only approximately 30,000 much rancor has ensued. Perhaps both sides of this debate should acknowledge elements of truth in the other’s position. When an unwanted child with or without medical or emotional problems is spared a devastating, lonely, neglected life, clearly the adoptive parents, no matter where they reside, are doing an act of great love and kindness. On the other hand, when a child is adopted by parents many thousands of miles away without the host country having made rigorous attempts to secure a permanent family for that child in its own country, there may be grounds to question whether the adoption is really in the best interests of the child or primarily in the best interests of the parents.

In order to achieve real-time positive results the international adoption community needs to have all the relevant facts and figures about the child in actual time. The ability to make decisions quickly based on reliable information is the key factor to success in the face of difficult situations faced by at-risk children. We need intelligent solutions that will provide us with relevant information and allow us to plainly see the risks and chances for success by either leaving the child in its country of birth or removing it and allowing it to be swiftly adopted.

An elementary school teacher told me the following story: She was watching the children in her classroom while they were drawing pictures. When she approached one girl who she knew had been recently adopted, she asked, “What are you drawing?” “I’m drawing a picture of love,” the girl replied. The teacher remarked, “But nobody knows what love looks like.” The girl shyly replied, “They will when I finish my picture.”

This commentary originally appeared in Policy & Practice, (March, 2005), 63 (1), 28.

Guest commentary by

Daniel Pollack, MSW, JD

Professor at Yeshiva University’s School of Social Work in NYC

Senior Fellow, Center for Adoption Research,

University of Massachusetts Medical School

Dan can be contacted at (212) 960-0836